KARACHI: The Finance Bill 2019 has proposed to restrict purchase of property (valuing more than Rs5.0 million), any other asset (valuing more than Rs1.0 million) by any person otherwise than by a crossed cheque drawn on a bank or through crossed demand draft or crossed pay order or any other crossed banking instrument showing transfer of the amount from one bank account to another bank account.

[the_ad id=”31605″]In case the transaction is not undertaken through a crossed banking instrument, such asset shall not be eligible for any depreciation or amortisation allowance and no related cost shall be allowed for computing any taxable gain on such transaction.

Furthermore, where persons fail to comply with the above provisions with regard to immovable properties (having fair market value of more than Rs5.0 million), penalty at the rate of 5% has also been proposed.

The proposed penalty will be computed on the basis of value as determined by the FBR or on the basis of stamp duty value, whichever is higher.

Provisions introduced through Finance Act, 2018 restricting purchase of immovable properties and certain motor vehicles by non-filers are also proposed to be omitted.

It appears that the above proposed provisions relating to the manner of payment for purchase of immovable properties and other assets with corresponding penalties and other consequences have been introduced as an alternative measure to achieve the desired results.